KERC mulls surcharge for those opting out of grid power

A move by major stakeholders to shift from grid to captive and or green energy could come at a cost. Seized about anomalies this move could cause in terms of cross subsidy offered to domestic consumers’ vis-à-vis the industries opting for green power, the Karnataka Electricity Regulatory Commission (KERC) is mulling imposing cross subsidy surcharge for those opting out of grid power and as demanded by the electricity supply companies (Escoms).TNN | February 28, 2017, 08:54 IST

MANGALURU: A move by major stakeholders to shift from grid to captive and or green energy could come at a cost. Seized about anomalies this move could cause in terms of cross subsidy offered to domestic consumers’ vis-à-vis the industries opting for green power, the Karnataka Electricity Regulatory Commission (KERC) is mulling imposing cross subsidy surcharge for those opting out of grid power and as demanded by the electricity supply companies (Escoms).

Noting that the move by industries to switch over to green power and their conviction to opt out of grid power supplied by Escoms is purely market driven, M K Shankaralinge Gowda, chairman, KERC told TOI, “Escoms have represented this issue to us as part of their annual tariff filings for FY 2017-18 and we are taking a close look at it. The final orders that the commission issues will have something to state about this issue include their demand for surcharge,” he said.

Averring that this move to reduce dependency on grid power is per se not a question mark on the ability of Escoms to provide quality power as demanded by the industries, the KERC chief said, it could be more borne out of the economics of such a decision. Besides, if bulk consumers feel they can get power in open market at rates that are competitive than what their respective Escoms offer, it is natural that they will shift to such power and reduce dependency on the grid.

The other major challenge before the commission as it decides on tariff filings by the Escoms for revision in power tariffs, Shankaralinge Gowda said is the challenge that supply peak will pose sooner than later.

At present, Escoms are grappling with morning and evening load peaks. Once the state gets that 2000 MW solar power in the pipeline mid 2018, the question of supply peak will have to be dealt with and the commission is applying its mind to this issues as well.

Supply peak will not address either the morning or evening supply peaks usually that Escoms experience from 6am to 8am and 6pm to 8pm. This comes between 8am and 6pm when solar power production is expected to be at its peak.

Since it is not possible to store the power generated and used to manage morning and evening peaks, the power generator, Escoms will have to find consumers who can utilize this supply peak in a manner that it brings them revenue.